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Car dealers price drop adverts could be misleading, regulator finds

The advertising watchdog has censured Marshall Motor Group with a ruling that could have implications for all car dealers advertising used cars with a price drop.

Online marketing that gave a message of  “Price £19,480. Was £19,899. Saving £419.” alongside a used Mercedes-Benz in February 2023 has been deemed misleading by the Advertising Standards Authority, which found that consumers would interpret the marketing to mean they were making a genuine saving against the original selling price.

While used cars were unlikely to have a “usual” selling price because each one is unique, because Marshall made the savings claim the “was” price would be seen as a reference price against which consumers could make a genuine saving, said the ASA, however the car had been advertised at the higher price for a short period of time, five days, which the watchdog said had not established it as a reference for its value “and the price reduction did not represent a genuine saving for consumers”.

The ASA said it expected, where a “was” price was linked to a savings claim, that the advertiser would be able to demonstrate that the price had been offered for a sufficiently long period.

It refered to the CAP Code, a code of practice for advertising, which states price statements must not mislead by omission, undue emphasis or distortion.

Marshall Motor Group, in response to the advertising watchdog, had provided information showing the price of the vehicle had changed five times between February 5 and March 2 since its original listing for £19,890 on January 27, and it pointed out that price updates on used vehicles could be made daily, as they were based on market conditions using data intelligence and in some instances were amended automatically by business software intelligence tool.

The AM100 dealer group pointed out that as used cars depreciate it was too long to wait 28 days before reducing the price, if interest was low.

It would provide the pricing history to a customer before purchase, should they request it, said Marshall, which has dealerships across England selling marques including Mercedes-Benz, Volkswagen, Jaguar Land Rover and Honda.

This is the latest significant ruling that could impact on motor retailers, after the ASA ruled in 2017 that car dealers should not omit declarations that a used car has been previously used by a fleet or rental business.

In that case, AM100 car dealer Glyn Hopkin was advised alongside FCA Group following complaints about a pair of adverts for Alfa Romeo Giulietta hatchbacks which, the complainant highlighted, failed to acknowledge the vehicles’ use as part of a fleet.

In its conclusions, the ASA determined “because (the adverts) had omitted material information regarding the cars having been previously used for business purposes whilst part of a fleet” that “they were misleading”.

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